Nigeria will stop importing refined petroleum products
by 2019, Mr Ibe Kachikwu, the Minister of State for
Petroleum Resources, said on Tuesday in Abuja.
Kachikwu made the disclosure at a public hearing on
the review of petroleum pricing template for Premium
Motor Spirit (PMS) organised by the House of
Representatives.
He said that within two years, the Federal Government
revived refineries that were non-functional to contribute
about eight million out of over 20 million litres of petrol
consumed in the country daily.
He explained that the Federal Government initiated a
model which attracted foreign investors to partner with
the Nigeria National Petroleum Corporation (NNPC) to
repair the country’s refineries within the two years
period.
“This has consistently served as a target for this
government so that by December 2018, NNPC must be
able to deliver on some of the terms given them, one of
which is to reduce petroleum importation by 60 per
cent.
“By 2019, we should be able to exist completely on the
importation of petroleum products in this country.
“Cognisant of the fact that Dangote is building one
refinery, we expect to have an excess situation,’’ he
said.
The minister said that Nigeria must also have the
capacity to stop exporting crude oil.
According to him, selling crude oil is not different from
selling agricultural produce in an unprocessed manner.
“The world is leaving that, every member of OPEC is
leaving that because of the prizing, volume and market
challenges is now shifting from selling crude to selling
refined petroleum products.
“That is what this country must do and there is a
template we are working on.
He further said that the ministry intended to create an
enabling environment that would promote local refining
of crude oil.
“The issue is not giving licences to illegality, the issue is
how do we ensure that we create an investment
environment that pulls individuals from illegal creek
activities to legal business activities.
“We are looking at modular refineries, about 60 licences
were given out just before this government came in and
none of that was utilised because it requires a lot of
money, land and crude security.
“But now we are going out to identify refineries, get
individuals who can build refineries on the same
platforms where our refineries are and identify some
key specific modular refineries backed up by foreign
investments working with state governments.
“Hopefully this will address the restiveness you see in
the Niger Delta,’’ the minister said.
On the possibility of reducing the fuel pump price,
Kachikwu said there was no padding in the petroleum
pricing template for PMS currently sold at N145 per
litre.
According to him, 71 per cent of the cost is for the
production and freight, 18 per cent balance is covered
by depot charges and retailers margin.
“In other words the storage tanks, the amount you get
by verge of operating a filling station takes another 18
per cent, the output of those is already taking you to
roughly about 90 per cent.
“The transportation is less than 10 per cent; we probably
can do better, the templating is an insignificant 1 per
cent or 2 per cent but that’s not where the problem is.
“The problem is with foreign exchange rate
“There are two key elements in the template, how much
you buy it is internationally fixed, it is not a Nigerian
issue the cost of foreign exchange is a monetary policy
issue.
“So at the time we did the template the Central Bank of
Nigeria (CBN) monetary policy was N245, that was the
basis upon which we calculated the pricing, today N305
is the exchange rate.
“And what we have tried to do is to ensure that anybody
who sells us foreign exchange follows basically the
instructions of the CBN in terms of the amount,’’ he
said. (NAN)
